Disadvantages to selling property at auction

Heidi Armstrong, Director of Operations, State Custodians Mortgage Company
While auctions are the best way to find out exactly what the market is willing to pay for your property, there really is no guarantee your property will sell successfully at auction.  So if you are considering going down the auction path, definitely weigh up those present pros and cons carefully.  
There are a number of reasons why property auctions may not be for everyone and as the market value of your property is decided on the spot at auction, you can never be sure of exactly how much it will fetch.  
I guess the other thing to keep in mind is that the reserve price is not always met and then you do have to decide on how to proceed.  If it is passed in, potential buyers then have a better idea of what others are prepared to pay and as a result it could reduce their offer.  
Looking at marketing costs, though these are generally fixed, they may be higher than if you were to sell your home by other means.  And due to set time frames and in order to gather as much interest in your property as possible, marketing must be consistent, strong and it has to saturate the total target audience of potential buyers and to do this within a very limited period.  
As the buying process is condensed into this window of opportunity, it may not always be the ideal time to sell.  More interest and a better price may be right around the corner.  And after the reserve has been met and that hammer does fall, it’s pretty much a done deal.  
Definitely auction contracts you have got to think of them as unconditional, they can’t be subject to financer inspection and house auctions may not therefore suit some buyers who are more comfortable with those traditional methods of sale, where the urgency and the finality are not quite so fierce.  But definitely I say talk to your agent, talk about how to sell your home successfully including all these pros and cons of selling your home at auction. 
If you are looking to sell your home at auction and perhaps looking to upgrade, then I definitely say give one of our consultants at State Custodians a call, so that we can help you with the loan process.

Ask your mortgage questions directly to askheidi@statecustodians.com.au, 1300 654 617 and visit statecustodians.com.au for your mortgage needs.

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